AM Best Affirms Excellent Ratings For Bermuda’s NEWGT Reinsurance

KUALA LUMPUR, Dec 5 (Bernama) -- Global credit rating agency, AM Best has affirmed the financial strength rating of A- (Excellent) and the long-term issuer credit rating of “a-” (Excellent) of Bermuda’s NEWGT Reinsurance Company Ltd (NEWGT).

The outlook for these credit ratings (ratings) is stable, reflecting NEWGT’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

In a statement, AM Best said NEWGT’s balance sheet strength is well-supported by its risk-adjusted capitalisation, which was assessed at the strongest level, as measured by Best’s Capital Adequacy Ratio.

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As of the financial year ending on March 31 (fiscal year 2024), the company showed somewhat elevated underwriting risks from significant premium growth during the period, and it expects to maintain a similar level over the coming years.

Underpinned by its stable internal capital generation and conservative investment portfolio, NEWGT is viewed to have enough capital buffer and a moderate level of reinsurance dependency. However, its exposure to potential credit risk is mitigated partially by a high-quality and well-diversified reinsurance panel.

A wholly owned subsidiary and captive insurer of ITOCHU Corporation (ITOCHU), one of Japan’s largest general trading companies, NEWGT’s operating performance has been consistently positive during the most recent five-year period.

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For fiscal year 2024, while premium income from businesses related to its ultimate parent, ITOCHU, and a third party increased, net income moderately dropped due to sizeable reserves mainly booked to reflect uncertainty in United States tariffs and potential underwriting losses in Thailand from the Myanmar earthquake in March 2024.

Going forward, AM Best expects some volatility will accompany NEWGT’s expansion plan into non-marine business that carries higher net retention. Nevertheless, the company’s operating performance is expected to remain profitable given its prudent underwriting practices and reinsurance programmes.

-- BERNAMA